Speaking about Bitcoin the duo explained to NACHA attendees of the power of virtual currency and its inevitability in the long run and how it is not disruptive in its literal meaning. Shrem and Voorhees went to the forum to convey two basic messages. First, how organizations can tap the strengths of Bitcoin and figure out ways to adopt this new technology? Second, the desire of BitInstant to be legally compliant. Relative anonymity is Bitcoin’s thing but, the duo went on to explain that there can be multiple layers of regulatory scaffolding on top of the Bitcoin system depending upon how regulators want it, only on a condition that they work with them.
In their presentation [PPT] “Money without Borders” Shrem and Voorhees explained the basics of Bitcoin, features of the currency, the network behind the currency and gave out some statistics about BTC. According to the presentation, there are a total of 9,911,550 BTC with a market cap of 110,414,469 USD.
The interesting part of the whole forum was how Bitcoin as a currency and transaction system as of whole “eviscerates entire statutes of law.” This particular conclusion was derived at after the last presentation at the forum by Senior Legal Counsel to the Federal Reserve titled “The Implications of Dodd-Frank Section 1073”. A small provision in the Dodd-Frank, dictates new requirements that need to be fulfilled by “Remittance Payment Company” (RPC). This law requires such companies to disclose quite a lot of information about money transactions, which at times is difficult to disclose.
This is where Bitcoin collides head-on with the law. Bitcoin is not a centralized system but is a decentralized computer network yet a RPC nonetheless as transactions are being carried out. Thus Bitcoin violates the law when it comes to disclosure of information.
The duo asked the presenter what it meant for Bitcoin and what could be the implications? The presenter said, “well, if the regulators don’t like what Bitcoin is doing, it’s very possible they could come after you.” To this Voorhees replied that there was no “you”. On this the counsel said in that case the law would go after the server farms and the infrastructure. This is where it gets more interesting. There are no server farms and no infrastructure. An individual is in charge of his BTC and he relinquishes control as and when he decides and it all happens through a decentralized system.
The legal counsel had no clue as to the fact that there were no ‘sever farms’ to seize.
[Source: BitInstant Blog]